Posts Tagged ‘payment’

Mobile banking is gaining traction and is expected to reach 50 percent of consumers by 2016, according to a new study from global business advisory firm AlixPartners.

The “Mobile Financial Service Tracking Study” looked at mobile banking trends over the next five years and predicted areas of growth. The study also compared how certain banks are stacking up in their mobile efforts.

Mobile switch

According to the study, mobile bankers tend to be higher-income consumers and hold more products within their accounts.

Mobile banking also played a large role for consumers who were thinking about switching financial institutions. According to the study, 39 percent of consumers who switched banks in the past six months said that mobile was an important factor when choosing a bank.

Recent developments suggest that mobile payments at scale is getting closer, but with new players introducing their own services regularly, is there room for everyone and if not, which solutions are most likely to take the lead?

There has been a flurry of activity in the mobile payments space lately, with the introduction of the Google Wallet, PayPal’s new peer-to-peer NFC solution and Isis signing up the major payment networks to name just a few. While these developments are helping to enable mobile payments and build awareness, it still is not clear which solutions are likely to drive the most usage, something that is key to success here.

“But we are still far away from the mass market as many challenges are yet to be overcome such as lack of user demand, fragmentation of technologies and lack of infrastructure and devices when it comes to NFC,” she said.

Let’s get physical

Mobile payments are predicted to grow 40 percent and reach 2.5 billion users globally by 2015, according to a recent report from Juniper Research. The dollar volume of transactions made via mobile will also continue to grow and is expected to exceed $1 trillion by 2015, according to a new study by Yankee Group.

While consumers continue to become more comfortable using mobile devices for digital media purchases, the one of the main hurdles for mobile payments continues to be driving usage and adoption for physical goods.

One of the reasons for this is that most of players are not yet adequately addressing the consumer experience in mobile payments, per Charles Golvin, principal analyst at Forrester Research, Cambridge, MA

“What is being promised by the mobile payments offerings is really not offering all that much to consumers,” Mr. Golvin said.

While mobile payments providers promise greater convenience to consumers, Mr. Golvin contends that is not clear how pulling out a phone, waving it over a device and keying in a code is more convenient than pulling a credit card out of a wallet and swiping it through a point-of-sale machine.

“One of the things that we’ve learned is that consumer behavior changes very slowly,” Mr. Golvin said. “Until we see other benefits being marketed to consumers, such as automatic rewarding of loyalty points, automatic redemption of coupons, digital receipts and a deeper integration into the consumer experience, I don’t think mobile payments will take off.”

With deeper integration into the consumer experience a key criteria for success in mobile payments, some vendors do appear to trying to address these issues.

For example, Google Wallet promises the delivery of mobile offers and the ability to redeem them in-store.

“The ability to receive that offer, go to the store and have that offer redeemed seamlessly by virtue of paying with Google Wallet – that’s the one piece of deeper integration,” Mr. Golvin said.

As smartphone vendors and mobile operators shift their strategies to incorporate wireless payment technologies into mobile phones, consumers will soon be able to drop their wallet and carry every piece of important payment information on their handset.

NFC is already starting to be built into a range of Android smartphones, RIM and Nokia have committed to the technology and Apple is reportedly adding the contactless technology to its new iOS devices. GPlus has created an infographic detailing how NFC will replace our wallets and shows how companies are set to revolutionise the way we shop.

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Retrevo has released the results of a study, looking at the buzz surrounding Google Wallet, NFC, and new ways to pay for products in-store with a mobile device. The study finds 79% of people aren’t ready to start using their phones to pay for goods in stores.

“Even for the mobile wallet optimists the NFC glass is only about a quarter full,” says Retrevo. “The fact is, only around 21% of consumers would like to buy things with a mobile wallet and are waiting for that capability to be in their next cell phone. Unfortunately for mobile wallet providers, the overwhelming majority (79%) of consumers in this study, are either not interested in mobile wallets or don’t know what a mobile wallet is. It also looks like interest in mobile wallets divides along generational lines with 28% of 18 – 35 year olds expressing much stronger interest in NFC than the large majority (75%) of the 50 and older set who don’t want anything to do with it. Men appear to be more interested in buying things (27%) with their phones as women (15%) with nearly twice as many men as women indicating they would like to be able to buy things with their cell phones.”

My guess is that as the mobile wallet products hit the market more, on phones people are using anyway, they’ll catch on more, and the buzz will grow, provided retailers adopt these payment methods on a mainstream scale. That obviously will have a great deal to do with it.

Starbucks is keeping up with its ever-growing tech-savvy customers and has rolled out an Android app that lets them pay for their beverages and other goods via their mobile device.

The mobile loyalty app lets consumers make in-store purchases as part of the company’s national program that is now available at nearly 6,800 company-operated stores. Starbucks released the iPhone version earlier this year.

“Yes, we’re seeing a steep increase in user adoption of the payments solution,” said Drew Sievers, cofounder/CEO of mFoundry, San Francisco.

“There is very stro

ng demand for the product,” he said.

Founded in 1971, Starbucks is a global roaster and retailer of specialty arabica coffee.

The coffee giant tapped mFoundry to power the application and mobile payment program.

How it works

Consumers can enter their Starbucks Card number in the mobile app.

Then, their device will display a bar code and customers can use their smartphone as a Starbucks Card to make purchases.

The survey in question reveals that consumers, particularly “trend-setting 18-34 year-olds,” are more than receptive to mobile phone payments.

“Consumers are now poised for the next step,” MasterCard announced, pointing to the emergent use of smartphones as mobile wallets.

Conducted by Kelton Research, the study shows 62% of Americans who use a mobile phone would be open to using their device to make purchases.

“Consumers are already living a mobile lifestyle so using their phones to make payments on a daily basis is a natural next step,” said Mung Ki Woo, group executive, mobile at MasterCard Worldwide. “2011 is the beginning of the NFC mobile payments era, and consumers are eager to get their hands on the first commercial deployments in the U.S.”

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